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Useful Enhancements to Standard Auto Insurance Coverage


The government requires every driver to carry auto insurance coverage. States have their own auto insurance rules that specify the minimum coverage each motorist should have. However, the standard auto insurance coverage may not be enough to cover all the risks you might face on the road. Fortunately, different enhancements are available to improve your coverage.

Below are some enhancements to consider.

New Car Replacement

A brand new car starts to depreciate in value from the moment you drive it off the dealership. After one year of use, the car can depreciate by more than 20%. For example, if you buy a brand new car for $30,000, you might sell it for $24,000 or less after one year.

Standard auto insurance coverage only compensates you for the actual value of a car in case someone steals your car or the insurance company writes off the car after a crash. With standard coverage, the compensation check may not be enough to buy a brand new car to replace the damaged or written-off car.

Your auto insurance carrier compensates you for the replacement value of the car if you have new car replacement coverage.  For example, if someone steals your $30,000 car, you will receive a $30,000 compensation check. New car replacement coverage doesn’t account for depreciation.

Accident Forgiveness

Your auto insurance carrier uses your driving history to calculate your premiums. A driving history includes things like auto accidents and traffic violations. A bad driving history means insurance carriers consider you to be a dangerous driver who should pay higher premiums relative to other, safer drivers. For this reason, your coverage rates may go up after an accident.

Fortunately, your rates won’t go up if you have purchased accident forgiveness coverage. The coverage, as the name suggests, forgives you so that your rates don’t have to go up even if you make an accident claim. Accident forgiveness essentially keeps your insurance premiums predictable.

Roadside Assistance

Roadside assistance program comes in handy if your car breaks down and you need help. Here are some of the cases in which roadside assistance comes in handy:

  • You have a flat tire but no spare tire
  • Your car has stalled without any obvious reason
  • Your car has overheated and you can’t drive anymore
  • You have run out of fuel and there is no gas station nearby
  • Your car’s battery is dead and you can’t start the car

If you find yourself in any of the above situations, and you have roadside assistance coverage, your insurance carrier will tow your car or deliver the tools (such as fuel) you need to drive off.

Vanishing Deductible

The deductible is the money you have to pay out of your pocket before the carrier settles a claim. For example, if you experience $5,000 damage and you have a $1,000 deductible, then you pay $1,000 and your carrier pays $4,000. The deductible helps to keep your costs low because your carrier doesn’t have to pay your entire damages.

Unfortunately, your car may experience damage when you don’t have money for the deductible, and you may fail to repair our car. You won’t experience such a scenario if you have vanishing deductible coverage. Vanishing deductible coverage reduces your deductible every year you go without an accident. The deductible reduces to zero after several years with no accident.

The above list of auto insurance enhancements is not exhaustive; there are many other enhancements. At Lanham Insurance Agency, we can review your auto insurance coverage and advise you on the enhancements to consider. Consult us for a comprehensive review of and advice on your auto insurance needs.